RECAP 2-5 MARCH

THE WEEK THAT WAS...

RECAP 2-5 MARCH

AFTER THE HIGH VOLATILITY DURING THE BUDGET DAY, THE INDEX STARTED MOVING IN THE NORTH, MONDAY BEING SLIGHTLY A LACKLUSTER DAY...

ON TUESDAY, IT WAS TOTALLY DIFFERENT..

THE INDEX WENT ON MOVING HIGHER AND HIGHER AND WENT ON TO MAKE A NEW HIGH BREAKING THE PSYCHOLOGICAL LEVEL OF 9000, BEFORE CLOSING AT 8996.

ON WEDNESDAY, THE RBI GAVE A SURPRISE REPO RATE CUT FROM 7.75% TO 7.5%, TRIGGERING A MASSIVE GAP UP OF 120 POINTS.

BUT THINGS CHANGED SUDDENLY..

WITH NO OTHER TRIGGERS LEFT FOR THE UPMOVE TO CONTINUE, PROFIT BOOKING AROSE, WHICH MADE THE INDEX DECLINE MORE THAN 200 POINTS FROM THE HIGH OF 9119 TO 8893...

ON THURSDAY, NOTHING CHANGED THAT MUCH...

THE DOWNMOVE CONTINUED TOWARDS THE LEVEL OF 8849, AFTER WHICH WE WITNESSED A DEAD CAT BOUNCE, TOWARDS THE LEVELS OF 8957, BEFORE CLOSING AT 8937.

OVERALL, MY BOAT STORY (LINK:http://dipesh-majumdar.blogspot.in/2015/03/nifty-8922-open9108-high-9119-low-8893.html#comment-form) STILL LOOKS VALID.

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SENTIMENT IS STILL LOOKING BEARISH..

IND VIX IS AT 14.44, 52 WEEK HIGH 39 AND LOW 9..

ITS DOWN 30% IN THE LAST 1 WEEK.

OPTIONS LONG STRADDLE? LONG STRANGLE CAN BE A GOOD IDEA AS THE VOLATILITY INDEX AT SUCH LOW POINTS (AS THE OPTION PREMIUM WILL RISE WITH A RISE IN VOLATILITY )